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Everything You Need To Know About Remote Employer Of Record

Choosing our SaaS based PEO/EOR Solution enables you to build and manage 100% pure remote teams and expand into new markets 90% faster.

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Once disapproved by many employers, remote working has become a global practice for businesses worldwide.

As per the survey conducted by Gartner in 2020, 74% of CFOs find remote work an excellent opportunity to save the company’s costs and plan to keep some percentage of the workforce remote permanently.

In the last two years, the story has changed a bit, and now young employees find remote work more natural and flexible, and they are not ready to go back to the onsite setup.

In the latest survey, ‘People at Work 2022’, 64% of the global workforce said they would prefer to leave their job if asked to work from the office full-time.

Looking at the current scenario, remote and hybrid work models are here to stay owing to the way they made an impression on both the employees and employers.  However, a business running remotely needs to change the way they hire talent and manage business processes. Here comes the need for a solution like a remote employer of record.

Hiring remote workforce can combat skill shortage and cut down the cost of relocation. However, hiring talent from across the globe is challenging and risky. Employers need to comply with labor laws of the countries from where they plan to hire. Working with Employer of Record is the best solution for employers to onboard legally and manage talent compliantly.

A remote employer of record manages many remote business processes such as onboarding, payroll, benefits management, and insurance for remote companies while staying compliant with local laws and regulations.

Let’s share in more detail how a remote employer of record can help you.

What Is a Remote Employer of Record?

An employer of record is a global employment solution that takes care of onboarding and payroll processes, managing benefits, insurance, and paying local taxes for your company’s remote employees.

Remote EOR helps you manage full-time employees in foreign countries without having a federal entity or a third-party staffing service provider.

How Can an EOR Help Your Remote Hiring Process?

Remote employer of record gives you a feasibility to hire talent in any of the countries where your EOR has an entity without you having any physical presence there.

EOR makes it possible for you to expand your business in new markets while simplifying onboarding, payroll, benefits, and compliances for you to build a global team confidently.

When you work with the best EOR, you get support for the following hiring/ onboarding processes:

Producing compliant employment agreement

Employment contracts are important documents when you plan to hire talent overseas. These legal documents come in handy when any dispute arises between employer and employee.

It contains all the important details such as working hours, salary, benefits, leaves, termination rules, notice period, and other confidential employment conditions that both parties mutually agree before signing it.

A one-size-fits-all employment contract cannot work for each of your foreign employees. Every country has different requirements and you need to create employment contracts around the country’s labor laws.

Some common employment contract errors are incorrect application of CBA (collective bargaining agreement), inaccurate salary raises, and accrued leaves.

EOR assists you in producing error-free yet compliant employment contracts for onboarding local employees.

Managing workers’ compensation

For global companies, it is mandatory to develop a compensation plan that perfectly suits each of the foreign employees and the business strategy. Compensation has many factors that cannot be standardized and will vary depending on the country’s living standards and labor regulations.

The main components of compensation formulation include base pay, cost-of-living adjustments, benefits, housing allowance, home leave, social contributions, other variable compensation, and tax compliance.

With remote EOR on your side, you don’t need to worry about compensation planning and strategy. It is a part of EOR’s service to guide companies to create compensation plans for their global employees that keep them at low risk of getting into any kind of legal dispute with labor laws or employees while taking care of their international business strategy.

Providing health benefits

Many countries have mandated health benefits for employees. In a remote setup, creating a perfect health benefits plan becomes more challenging.

For example, employers’ strategy for providing health incentive plans for Philippines employees cannot work for Australian based employees. Understanding a country’s labor rules regarding health benefits and implementing them while creating the health plan can be another challenge for HRs.

EORs address various circumstances and suggest the best health incentive plans customized to the employee requirements.

Guiding through local employment regulations

Imagine when you are hiring talent from multiple countries, and you have no option but to always stay updated with local employment regulations. A minor mistake in implementation and adherence of the labor laws can create hefty penalties.

Collaborating with remote EOR gives you labor laws experts at your side. You can ask them for guidance in your time of need.

How Does an Employer of Record Help Businesses Manage Remote Work Processes?

Strategic use of technology helps you speed up the business processes, make data-driven decisions, and add higher value to the organization as compared to the competitors who are not using it.

So, when you collaborate with a digital employment solution like an employer of record, you don’t need to worry about employment-related tasks that otherwise consume a lot of time for HRs.

When you assign an employer of record as a co-employer for your remote employees, you are making them legally responsible for handling all employment-related legal aspects.

It keeps you risk-free as no employee can directly claim anything from you as remote EOR has to handle it.

Manage your back-office tasks

Back-end tasks related to onboarding employees, employment contracts, processing payroll, filing employee payroll taxes, crafting benefits plans, staying compliant, and staying updated about labor laws are managed by EOR on your behalf.

Maintain compliance

It is EOR’s duty to help you comply with government regulations for whichever country you hire them. It includes crafting compliant employment contracts, paying salary on time, withholding the correct amount of taxes, and then submitting it to relevant authorities.

Save time and money

A happy team is a group of satisfied employees. To make this happen, it is essential to focus on your employees’ expectations from your company. Handling every query of your employees, solving their issues, and taking care of payroll and other compliances consume time and money.

Remote employer of record, on the other hand, deals with all these employees and employment-related responsibilities of its own. It saves you time to focus on other business goals you have.

How EOR Can Solve Remote Working Challenges

The remote work model comes with its own set of challenges such as handling foreign employees’ payroll, benefits, insurance, offering other HR services and staying compliant to the employees’ country labor law. These challenges can make the work processes difficult and slow. EOR offers a helping hand for managing the below challenges with innovative solutions.

No more pay disparities

With a remote employer of record, you can completely cut down on the back-and-forth of pay disparity emails and discussions. EOR takes care of payment issues for your remote employees and compensates them fairly based on their location, expertise, time, and other factors that affect payments.

Improves talent retention

Going through a loop of hiring tasks such as publishing job ads, calling candidates, shortlisting resumes, interviewing candidates, and setting up tests to check suitability deserves applause.

Once you hire the right candidate, your focus shifts to retaining them; retaining the talent is an art that remote EOR handles perfectly. Salary delays are one of the biggest reasons for employee dissatisfaction, and it can push them to look for better opportunities.

EOR creates compensation plans that suit all remote employees as per their settings such as country, industry, experience, skills, etc. and pays them timely and error-free. It makes life easy for employers and employees and reduces unnecessary conversations.

Offers support service

HR administration, payroll management, and other employee related tasks are multifaceted, and some of these EOR cannot cover under its service, but can support you to handle it.

For example, hiring service is usually not an EOR’s responsibility; it only focuses on onboarding, payroll, and other HR services. But, you can expect support from them to find a reliable hiring service provider as they have expertise and knowledge in this field.

Manages operations in your absence

When your physical availability at the office is doubtful, and you can’t depend on anyone to handle payroll and other employee-related tasks, remote EOR takes charge and gives you a piece of mind to focus on other tasks confidently.

Limitations You May Face With Remote EOR

Remote employer of record services may not be useful for you in all situations. Your business strategy and employment needs play an essential role in deciding if EOR can make a difference for you or not.

Some of the limitations you may face with remote EORs:

Some business activities demand local incorporation

An employer of record is a cost-effective business expansion tool compared to setting up subsidiaries overseas. Some business models, such as supply contracts under local law, compulsorily require a business to be incorporated in the country.

In that case, an EOR cannot work as a business expansion tool but can be used limitedly for HR operations management.

Country-specific restrictions

Some countries have specific restrictions related to the use of EOR solutions. For example, in Germany, businesses are not allowed to hire talent through EOR solutions for more than 18 months. A few countries restrict the number of employees working through Employer of record.

Disparity in business standards

Every business has unique standards to maintain. When you hire EOR, you can face a bit of conflict in your company culture. Discussing it openly with an EOR service provider can help you deal with this effectively.

Atrophy of HR

Using EOR takes the load off the human resources division of the company. Outsourcing HR services can make your HR division fall behind. So, when you are planning to hire a global employment solution, you can consider re-shuffling the talent to learning and development.

Deciding When Should You Shake Hands With a Remote EOR

Understanding where and when to start looking for remote EOR asks for proper evaluation on your end. The following are situations that need EOR’s help to handle:

When you wish to onboard more employees

Hiring and onboarding many employees has its share of challenges. It needs your good attention. A minor mistake in onboarding can cause problems for new hires and your company and can create a never-ending loop of conversations.

So when you want to scale your team quickly, you can rely on a remote employer of record that helps in creating and handling error-free contracts, registration in the payroll system, perfect benefits plan and insurance, and understanding how you need to withhold tax as per the country you are hiring from.

When you wish to give a better experience to your employees

Employee experience is key to retaining talent for a longer period. Going through a long and tiring onboarding process, delays in salary, and no reply to employees’ queries can increase talent turnover.

Remote employer of record takes the responsibility of keeping your employees satisfied and improves overall employee experience.

When you want to expand your business

Imagine you want to start your business operation in a foreign country. You cannot do it without having an entity and following the country’s laws and regulations.

Remote EOR helps you with all legal requirements of running your business operation in a foreign country without needing an entity.

When you wish to save time and money

Remote EOR offers a wide range of services, including onboarding, background checks, payroll management, benefits and insurance, and all employee-related compliances.

If you struggle to handle it, you should take advantage of the EOR solution. It will save you time and money and let you focus on other business operations.

When you wish to focus more on core business

Core business activities are profitable, and it needs constant attention and improvement. When you are feeling you are lacking behind here and not getting a good time to focus on your core business, you can consider EOR.

Remote employer of record deals with employee and employment-related tasks that can distract you quickly. These tasks are non-profit-making but need similar attention, and EOR does it for you.

Both handling things by yourself or outsourcing them to HR service providers can put you under some legal risks. When you wish to offload these legal risks, remote EOR should be your first preference.

When you hire EOR, it offers your HR and payroll services and saves you from heavy legal penalties.

Why Multiplier?

If you are looking for a remote employer of record solution for handling your remote employees and employment-related tasks, you can rely on Multiplier.

Multiplier’s EOR solution is available in 150+ countries that lets you fulfill your desire to expand your business operation to foreign countries by onboarding foreign talent.

We take care of your remote employee onboarding, payroll, benefits, and insurance compliantly and minimize your risks of getting involved in any legal issues.

You can check our remote EOR plans, which are affordable compared to hiring a whole team of HR and accounting specialists at your end.

To learn more about Multiplier, you can book a demo with us!

Frequently Asked Questions

Q. How does a remote employer of record handle payroll and tax compliance for remote employees?

A remote employer of record manages payroll by collecting employee data, calculating wages, and ensuring timely payment. They also handle tax compliance by staying updated on local tax laws, calculating and withholding taxes, and filing tax returns on behalf of remote employees.

Q. Can a remote employer of record help with onboarding and offboarding remote employees?

Yes, a remote employer of record can assist with onboarding and offboarding remote employees. They can handle the necessary documentation, contract management, and compliance requirements during the onboarding process. Similarly, during offboarding, they manage the termination process, including final payments, benefits, and legal requirements.

Yes, there are specific legal and compliance considerations when hiring remote employees through an employer of record. These considerations include adherence to local labor laws, tax regulations, employment contracts, data privacy, and intellectual property protection. The remote employer of record ensures compliance with these considerations, mitigating potential legal risks for both the employer and the remote employees.

Hiring and onboarding using Multiplier ensures you hire remote talent with locally compliant, fool-proof job contracts, offer emphatic benefits and disburse salaries accurately with absolutely nil errors in payrolls.

Hiring and onboarding using Multiplier ensures you hire remote talent with locally compliant, fool-proof job contracts, offer emphatic benefits and disburse salaries accurately with absolutely nil errors in payrolls.​

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